Commentary

Mobile, Tablets, VOD to Drive $22 Billion Shift in TV Ad Market

Ipad-TVWhile the massive TV ad market has yet to feel much of a pinch from the emerging online and mobile video platforms, ABI Research claims a major shift is coming. In a new report, the company contends that by 2016 30% of pay-TV advertising ($22 billion) will shift to newer viewing formats, including VOD, tablets and smartphones. The change will fuel a wholly new ecosystem of ad technology and services for cross-platform advertising, the company argues.

Sam Rosen, senior analyst, digital home,  says that  new platforms like addressable advertising, targeting, new ad measurement and tracking and multi-screen deployments are becoming scalable among TV network. “A shift is already underway in the television advertising marketplace from linear ads inserted by a 24-hour schedule to advanced technologies that will increase the effectiveness of advertising spending,” he says of the report.

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A new supply chain of ad servers, ad splicers, decision and billing systems will serve this new way of serving TV advertising everywhere. Rosen names companies like Canoe Ventures, which supplies interactive ads, BlackArrow, which works on VOD advertising, This Technology (interactivity) and addressable, targeted ads by companies like INVIDI and Visible World.

How this emerging cross-platform TV ad ecosystem intersects with the existing infrastructure of mobile and online video advertising is less clear. Most video viewing apart from TV remains focused on shorter clips. Full episode viewing is on the rise, to be sure, but mobile viewing especially is still about on-demand clips that require shorter and more judicious use of ad spots. Traditionally, mobile ad networks have resisted being superseded by Web ad nets with unique technologies like contextual and device awareness. There is a special tech and skill set required for mobile. The same should hold true for video across platforms as well.

Even more intriguing is how mobile advertising encroaches on traditional TV real estate. We are already seeing connected TVs run Web video advertising on the big living room screen. As the app model migrates to TVs, who will be serving, targeting and measuring that advertising?

The “big shift” may come from several directions at once.   

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